Author: Michelle Lazo

Senator Elizabeth Warren is challenging the push for a stablecoin bill without anti-money laundering laws, citing national security risks in a letter addressed to House Financial Service Committee leaders Patrick McHenry (R-NC) and Maxine Waters (D-CA).

In her letter, Warren warns of potential risks associated with stablecoin regulation, emphasizing concerns about consumer protection, banking system stability, and national security threats.

The letter comes amid discussions about McHenry’s “Clarity for Payment Stablecoins Act,” which proposes increased regulation for stablecoins akin to traditional financial institutions.

Warren’s advocacy for the Digital Assets Anti-Money Laundering Act (DAAMLA) was reinforced during a recent Senate hearing, where she underscored the importance of anti-money laundering laws in stablecoin regulation efforts.

Long known for her stance against cryptocurrencies, Warren’s proactive measures reflect her commitment to imposing stringent oversight on the crypto industry, particularly regarding illicit financial activities.

Despite the pushback, stakeholders like Circle CEO Jeremy Allaire remain optimistic about the passage of stablecoin legislation in 2024, highlighting ongoing momentum in regulatory discussions.

Warren’s letter underscores her unwavering dedication to crypto regulation, although the outcome of legislative consensus remains uncertain.

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In the fund’s prospectus, Defiance highlights the distinctive characteristics and risks linked to daily leveraged investment outcomes, advising investors of the amplified volatility and riskiness compared to non-leveraged alternatives. It acknowledges the possibility of its ETF underperforming against tracked assets over extended periods, particularly if Ether futures remain stagnant or see modest gains beyond a single day, thus catering to investors actively managing their portfolios.

Advancements in Leveraged Crypto ETFs

Recently, Defiance submitted a filing for its 2X Short MSTR ETF, introducing a leveraged short position on MicroStrategy, a company often perceived as a leveraged bet on Bitcoin. However, this move drew criticism from industry figures like Blockstream CEO Adam Back.

Following suit, ProShares filed for their own 2X and -2X spot Ether ETFs, indicating a burgeoning interest in leveraged crypto offerings.

The Significance of Ether Futures ETFs

The launch of Defiance’s 2X Ether Strategy ETF comes on the heels of the SEC’s approval of Ether futures ETFs for public trading in October. This spurred a wave of applications from various asset managers, echoing the trend following the approval of the inaugural 2X Bitcoin futures ETF in June.

Although initial Ether ETFs saw modest trading volumes compared to Bitcoin counterparts, their approval signaled a potential shift in the SEC’s stance on crypto ETFs. Subsequently, Bitcoin spot ETFs were introduced, garnering considerable investor attention and inflows.

Currently, investors await the SEC’s verdict on ETH spot ETFs, with skepticism prevailing regarding their imminent approval.

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